Jul 2026· European Modern Studies Journal· 0 citations· 8 references
Abstract
Financial reporting quality is fundamental to transparency, accountability and effective governance in the public sector. In Kenya, state corporations play a crucial role in national development and public resource management yet persistent audit queries, weak internal controls and recurring financial misstatements continue to erode public confidence in their financial disclosures. This study examines the influence of audit committee (AC) characteristics, specifically independence, financial expertise and size, on the quality of financial reporting in Kenyan state corporations. Guided by agency and stewardship theories, and using a target population of 187 State Corporations, the study adopts a descriptive and correlational design. Data from audited financial statements and governance reports of audited financial reports of State Corporation was analyzed using descriptive and inferential analysis. Logistic regression model was used to test the effect of Audit Committee characteristics on the quality of financial reports in State Corporations. The findings reveal a positive significant effect of both committee independence and size on quality of financial reporting. In contrast, financial expertise had a negative significant effect on quality of financial reporting. The study contributes to public sector governance and policy by offering empirical insights and practical recommendations aimed at strengthening audit committee effectiveness, improving financial transparency and restoring public trust in the accountability of Kenya’s state corporations.
Corporate governance plays a pivotal role in ensuring financial stability and enhancing firm performance, particularly within the financial services sector, where governance lapses can trigger systemic risk and substantial investor losses. Within this context, audit committee dynamics and CEO attributes emerge as critical governance mechanisms that shape monitoring effectiveness, financial reporting quality, and strategic decision-making. The purpose of this study is to assess the impact of audit committee dynamics and CEO attributes on the financial performance of listed diversified financial companies in Sri Lanka. The analysis is based on a sample of 28 diversified financial companies listed on the Colombo Stock Exchange over the period 2016–2025, using secondary data derived from annual reports. Audit committee dynamics and CEO attributes were analyzed using regression to assess their impact on financial performance (ROA), controlling for firm size. The findings reveal that audit committee size exerts a negative effect on financial performance, while member expertise and meeting attendance demonstrate a positive and significant impact. Other variables, including audit committee independence, meeting frequency, chair tenure, and CEO attributes are found to be statistically insignificant. These results indicate that governance effectiveness depends more on functional quality and engagement of audit committees than structural or positional characteristics. Thus, the study suggests that boards and regulators should prioritize competency-based audit committee appointments and foster active participation, while investors may incorporate these factors into their evaluation of firm performance. Overall, the findings indicate that only selected governance mechanisms influence financial performance, emphasizing the importance of quality and engagement over structural or executive attributes.
K. Kulathunga, N. Silva, N. Ekanayake· Journal of Business and Tech...· 0 citations
Financial reporting accountability is a fundamental pillar of good governance and public trust. This study examines the effects of internal control systems and audit opinions on the financial reporting accountability of local government agencies in Depok City, Indonesia. Using a cross-sectional survey with a quantitative approach, data were collected through questionnaires, interviews, and documentation. The novelty of this study lies in simultaneously examining the influence of internal control systems and audit opinions on financial reporting accountability at the local government level, providing empirical evidence from an Indonesian municipal context. The findings indicate that effective internal control systems significantly enhance financial reporting accountability, although weaknesses in the financial competencies of personnel remain a challenge. In contrast, audit opinions do not significantly affect accountability because they primarily assess the fairness of financial statements rather than the transparency and accountability of government performance. These findings suggest that strengthening internal control mechanisms alone is insufficient without improving human resource capacity and organizational governance. The study concludes that financial reporting accountability is more strongly driven by effective internal controls than by external audit opinions. The findings provide practical implications for policymakers to strengthen governance through capacity building, integrity-based organizational culture, transparent performance evaluation, and greater public participation in financial oversight
N. Novitasari, Hafiduddin Hafiduddin, Annisa Alifa Ramadhani et al.· International Journal of Con...· 0 citations
This paper aims to examine the relationship between board attributes and firm performance. Financial reporting quality (FRQ) is tested as an intervening factor. Reporting quality is operationalized through accrual-based and real earnings management. The moderating factor is audit committee voting power. The present study extends corporate governance research in publicly listed companies.
This analysis is based on data from 104 nonfinancial companies listed on the Pakistan Stock Exchange between 2010 and 2022. It uses a random effects model and the Baron Kenny approach to examine the associations among board characteristics, FRQ and firm performance. The nonfinancial sector is highly competitive, offering an ideal environment to evaluate differences in governance frameworks and financial management.
The results indicate that board independence is significantly and positively associated with firm performance, whereas other proxies of corporate governance, including board meetings, size and board diversity, show no significant association with corporate performance. This paper confirms the moderating role of audit committee voting power in the relationship between board characteristics and firm performance. Importantly, this research also establishes that the indirect relationship between board traits and performance is mediated by FRQ.
The findings have significant implications for policymakers and regulatory bodies responsible for setting corporate governance standards. Policymakers should revise governance regulations to ensure corporate boards are empowered.
This paper addresses the call of prior studies to link board characteristics by embedding FRQ and audit committee voting powers in the board-performance relationship, thereby addressing the inconclusive and contextual nature of board characteristics and their impact on firm performance.
Muhammad Adil, Areeba Khan· Journal of Accounting &...· 0 citations
Purpose: The research aims to analyze the main qualitative characteristics of the independent auditor's report and the audit committee's report of companies listed on the B3 (Brazilian Stock Exchange). Methodology: The research is descriptive, and the data presents information from 189 different companies according to the stock exchange classification, 10 sectors, and 19 subsectors.
Results: For the audit committees, a consistent increase in the publication of Audit Committee Reports was observed, reflecting greater transparency and commitment to good corporate governance practices. Additionally, the frequency of meetings varied according to the sector and the economic context, with an increase in years of instability, evidencing greater activity of the committees during critical periods.
Contributions of the Study: To offer a little-explored national empirical approach, as well as to propose an integrated view between audit and governance. It is recommended that future studies advance in measuring the effectiveness of these committees based on objective performance indicators and financial impacts on companies.
Pedro Antonio Melo Moreira, Naiara Leite dos Santos Sant’Ana, Maria Fernanda Silva Gomes et al.· Revista Ambiente Contábil· 0 citations
This study investigated the impact of audit committee characteristics on the financial reporting
quality of listed agricultural firms in Nigeria. Audit committee characteristics were disintegrated
into audit committee size, audit committee independence, and audit committee frequency of
meetings while financial reporting quality was captured using discretionary accruals. The study
adopted ex post facto research design. The study employed secondary data collected from
financial statements of listed agricultural firms from 2012 to 2023. The data were analyzed using
panel least squares regression technique, and correlation analysis employed to derive
meaningful insights. Findings from the study revealed that audit committee size has a positive
and statistically significant impact on discretionary accruals with a coefficient of 1.270 and a pvalue of 0.017. Audit committee independence was found to have a positive but insignificant
relationship with discretionary accruals, with a coefficient of 1.000 and a p-value of 0.302.
Similarly, audit committee frequency of meetings exhibited a positive and statistically significant
impact on discretionary accruals, with a coefficient of 3.480 and a p-value of 0.006. In relation
to the control variable, firm leverage has a negative and significant impact on discretionary
accruals with a coefficient of -7.800 and a p-value of 0.003. Based on these findings, it was
recommended that the board should ensure that audit committee members possess relevant
expertise and knowledge to effectively oversee financial reporting processes, regardless of their
size, independence status, and frequency of meetings held.
Osayamen Bright Alohan· International Journal of Eco...· 0 citations
Recurring instances of financial reporting failure and earnings management in Nigeria have intensified interest in the audit governance mechanisms expected to safeguard the reliability of corporate financial statements, yet evidence on which specific audit attributes actually improve financial reporting quality among listed manufacturing firms remains inconclusive. This study examined the effect of auditor independence and audit committee effectiveness on the financial reporting quality, proxied by accruals quality, of manufacturing firms listed on the Nigerian Exchange Group.
Anchored on Agency Theory, the study adopted an ex-post facto research design within a longitudinal panel framework. All fifty manufacturing firms listed on the Nigerian Exchange Group were studied on a census basis over the period 2015 to 2024, yielding 500 firm-year observations drawn from audited annual financial statements. Data were analysed using descriptive statistics, Pearson correlation, the Hausman specification test, and panel regression.
The Hausman test favoured the random effects estimator (χ² = 5.82, p = 0.3276). Auditor independence exerted a positive and significant effect on financial reporting quality (β = 0.276842, t = 3.83823, p = 0.0002), and audit committee effectiveness also exerted a positive and significant effect on financial reporting quality (β = 0.341882, t = 4.01177, p = 0.0001), with the model jointly explaining 57.82 per cent of the variation in financial reporting quality.
The study concludes that auditor independence and audit committee effectiveness are complementary governance mechanisms that both strengthen financial reporting quality, and recommends that listed manufacturing firms safeguard auditor independence from managerial influence and strengthen audit committees through the appointment of financially literate members.
Akinosun A. A., Abere S. S.· International journal of res...· 0 citations